You might have noticed higher prices in your daily groceries, gasoline, and everything else recently，including tires of course!
Why TIRE prices increasing? We are analyzing from the following aspects:
1.Post-pandemic inflation is the key factor which is curtailing the purchasing power of money. In tire industry, the costs of raw materials such as carbon black, chemical additives, steel cord, etc. have been soaring too much.
Here are raw materials price index trend from third party:
※Date Source: www.bls.gov www.lgm.gov.my
From above, we could know that in the past 12 months, the costs of almost all the raw materials have been going up gradually even though the natural rubber price seems a little stable.
2.The Omicron outbreaking in some areas of China has greatly impacted the running efficiency of manufacturing, transportation and the work at ports (Shanghai, Qingdao, etc.)
3.You may have noticed that because of the policy of “Carbon Neutral and Carbon Dioxide Emissions”, China has already started more strict anti-pollution measures on all industries, many tires factories are required to replace their equipment and facilities to meet the new standards.
In terms of dual increase of operation and raw material cost, many tire factories in China have to be shut down or the production capacity have to be reduced proactively, which will cause the shortage of tire supplying in the market in the following period.
4.The Russia-Ukraine conflict has pushed crude oil price to the higher level, it has greatly affected the cost of chemical additives and logistic industry, which indirectly increases the tire prices.
5.For Q1 2022, the pandemic situation in global market keeps going better, but because of the unstable sea freight cost in past weeks, the pent-up demand of tire has not been released normally. After the stocks running out in the past 3 months, the global market demand of tire will be unleashed from April. 2022. However, the tire supply will not be sufficient in the market due to the supply chain disruptions in tire production and tire prices tend to go up.
With all above reasons combined, it is predicted that from April to May 2022, the tire price will still keep rising up while the tire supply will not be so sufficient in the market. In this case, please keep your eyes on your inventory and the market demand, a right purchasing plan in advance would benefit your business a lot.
